Congressional Record, Volume 154 Issue 77 (Monday, May 12, 2008)

[Congressional Record Volume 154, Number 77 (Monday, May 12, 2008)]
[Senate]
[Pages S4006-S4010]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

THE PRICE OF OIL

Mr. DORGAN. I want to talk about oil prices a bit. I noticed today
that some of my colleagues were talking about drilling in Alaska. They
said that we should drill in ANWR. That has become the hood ornament
for every conversation about energy. If we just drill in ANWR, then
things will be fine.
ANWR is one of those pristine areas we have set aside. There are some
who want to drill there as a first resort. If ever there is drilling in
some part of the world that we have set aside as one of the few
pristine areas left, then it ought to be a last resort. Why would you
go there as a first resort?
If you take a look at the Outer Continental Shelf and where the
reserves of oil and gas really are, You have on that list the Gulf of
Mexico, the West Coast, and the Outer Continental Shelf of Alaska. They
rank in that order. No. 1 is the Gulf of Mexico; No. 2 is California
and the west coast; and No. 3 is the Outer Continental Shelf of Alaska.
I was there with three of my colleagues, Senators Domenici, Bingaman,
and Talent, in the 109th Congress who introduced the legislation to
open Lease Sale 181 off the Gulf of Mexico to get new oil and natural
gas production. I am proud to say that became law. We got that passed
in the 109th Congress.
It was narrowed when we passed it, so I have actually introduced
another bill to expand that. I think we should be in the eastern Gulf
of Mexico producing more, and we have made progress as a result of my
past efforts with Senators Domenici, Bingaman, and Talent. So don't
tell me about ANWR is going to solve all our problems. We are trying to
open even more in the Gulf of Mexico for additional production.
With respect to the price of oil at this point, it's been bouncing
around at the top like a roller coaster. But here is what is happening
with the price of oil. It has nearly doubled in the last year. That
should be no surprise to people. If you drive a car you know what is
going on. It nearly doubled in the last year.
In my judgment there is nothing that justifies that, and I want to
talk about that a little bit. There is nothing with respect to the
fundamentals of supply and demand that would justify doubling the price
of oil in one year. Take a look at what Stephen Simon, senior vice
president of ExxonMobil, a company making enormous profits, said. By
the way, they have permagrins. They can't help but smile all the way to
the bank with their record profits, some of the highest profits in
history. Mr. Simon, said on April 1:

The price of oil should be about $50-$55 a barrel.

Clarence Cazalot, CEO of Marathon Oil, said,

$100 oil isn't justified by the physical demand in the
market.

Fadel Gheit, Senior Energy Analyst with Oppenheimer & Company who has
more than 30 years in this business said to the Star-Telegram on
October 26, 2007,

There is absolutely no shortage of oil. I'm absolutely
convinced that oil prices should not be a dime above $55 a
barrel.

He is talking about the futures market.

I call it the world's largest gambling hall. . . It's open
24/7. . . . Unfortunately, it's totally unregulated. ... This
is like a highway with no cops and no speed limit, and
everyone is going 120 miles an hour.

New Jersey Star Ledger:

Experts, including the former head of ExxonMobil, say
financial speculation in the energy markets has grown so much
over the last 30 years that it now adds 20 to 30 percent or
more to the price of a barrel of oil.

Here is an example of increases in the speculation in the futures
market as opposed to commercial contracts. Speculation has rapidly
increased. You can see it has gone up near the 40 percent mark. You
will see where it has gone just in recent years, up, up, way up. What
has happened is we have much more speculation in the futures market
that determines the price of this commodity.
Who is making money with all this? I said the other day, I don't know
this guy from a cord of wood. His name is Andrew Hall. There is a story
in the Wall Street Journal: ``Trader Hits Jackpot In Oil As Commodity
Boom Roars On.''
My guess is this fellow doesn't actually want to buy oil or actually
acquire oil. He is just speculating in the futures market. Will Rogers
said:

You will buy things you will never get from people who
never have had it.

Right? And you make money all along the way. You have the speculators
in neck deep and hedge funds in neck deep in the futures market
speculating. Here is a guy who made a quarter of a billion dollars in
the last five years speculating in the futures market.
Some say the futures market, you need that. I agree you need that.
You need that for liquidity, and you need it for hedging. That's
absolutely true. But you don't need a futures market and should not
allow a futures market for energy that ratchets up the price of energy
in an unbelievable way, solely due to speculation. The fact is, it does
great damage to our economy and does great damage to industries in this
economy.
I believe we have had five airlines go bankrupt in the last month. We
have trucking firms threatening to go belly up because they can't
possibly afford to pay for the fuel and make a decent profit. This has
an unbelievable impact in our country. It severely damages our economy.
I come from a State that is 10 times the size of Massachusetts.
So you can put ten Massachusetts in my State. We do not have a very
large population, but we drive a lot. We are an agricultural state so
we use a lot of fuel. Incidentally, per person we use twice as much
fuel as New Yorkers use. We use twice as much fuel per person per
capita as New Yorkers do, so when this shoots way up through the
stratosphere, it hurts us much more than other areas of the country. We
know this in a very personal way.
Now, what do we do about that? Well, I have talked about the
unbelievable orgy of speculation in the commodity markets. We ought to
dampen that speculation by increasing the margin requirements. Buy a
stock on margin, you have to put up 50 percent of the money to buy the
stock. Buy an oil futures contract, in most cases, you put up 5 to 7
percent to buy an oil futures contract.
If you have too much speculation in that marketplace which is well
above that which is needed for liquidity and hedging and normal
commercial functions, then you have too much speculative capability,
and there is too much speculative activity. Thus, we ought to wring
that out. I think there is a way to do that, and that is by increasing
the margin requirements.
Now I want to go to the next piece of information, and that is the
bill I introduced three months ago to suspend filling the Strategic
Petroleum Reserve. I was thinking today about the movie ``Dumb and
Dumber.'' I actually watched a little bit of it because it was so dumb.
Dumb and dumber represents a policy of putting oil underground at a
time when oil prices are up around $128 a barrel. I know ``dumb'' is
not a term of art, but I cannot think of anything that would be dumber
than continue a policy that makes no sense. Oil is going through the
roof so let's stick oil underground by taking it out of supply, store
it underground, and thereby increase the price.
Well, here is what we should do instead. This administration is now
putting about 70,000 barrels of oil every single day, 7 days a week, at
locations like Bryant Mound, Big Hill, and West Hackberry. These are
places on the Gulf Coast with salt domes where we

[[Page S4007]]

store oil. What is the purpose? It is called the Strategic Petroleum
Reserve. We call it the SPR for short. Because if we run into some
trouble some day, we want oil preserved in an SPR, and we can call on
that oil.
Here is what it looks like. It includes big old tubes that pump oil
in the ground. This is the oil that ought to be in the supply pipelines
right now so, when you drive up to the gas pump, you are paying a
little bit less than you are now paying. Instead of it being available
at the gas pump, it is being put underground in the SPR.
We are required as a country by international treaty obligations to
have at least a 90-day reserve. We are at about 118 days if you take
public and private stocks into account. We are well above our
international requirement.
From what I can tell, there are 67 Senators who have signed letters
or made statements to the President saying: Stop it. Do not stick oil
underground at this time. This is oil that comes off the Gulf of Mexico
as a royalty-in-kind oil. Instead of putting it in supply, they are
sticking it underground. Furthermore, the Strategic Petroleum Reserve
is 97 percent filled. It is 97 percent full. And when oil is $128 a
barrel, we are sticking it underground. It makes no sense; it defies
all common sense.
Yet 51 Democratic Senators sent a letter to the President, and 15
Republicans Senators sent a letter to the President. Also, the
Republican Presidential candidate, John McCain, and said ``stop it.''
That's at least 67 Senators.
Last week, Doug Steenland, the President and CEO of Northwest
Airlines testified before the Congress. He said:

Certainly with the prices at this level, and given the
demand out there, we don't need to be filling the Strategic
Reserve at $122 per barrel.

Now, obviously he has a vested interest, because he and others are
engaged in the airline industry.
Here is a quote from James May, President and CEO of the Air
Transport Association of America:

One of the most important and immediate steps that the
government can take to help the economy is to stop filling
the SPR.

Why do we hear from airlines? We are hearing from airlines, truckers,
or any number of industries or families and businesses. The airlines
are hurt unbelievably by these prices and so are trucking firms.
American families are pulling up to a gas pump trying to figure out how
do I manage to pay for this tank of gas. It is not unusual to hear
industry officials say: Stop it.
John McCain, Senator McCain:

With oil at over $100 a barrel and an adequate supply in
the [Strategic Petroleum Reserve], it is time to suspend
purchases.

Now, why is it that everyone can hear this message except the
President and the Vice President? I am told the Vice President is the
one who is absolutely insistent that we keep putting oil underground.
Why is it that everyone can understand and hear this message loud and
clear except the President and his Vice President?
Is it not probably time for all of us to insist that we do that which
we know should be done? Fifteen Senators from the minority sent a
letter to the President on April 29, 2008, and said:

We write today to request that the U.S. Department of
Energy immediately halt deposits of domestic crude oil into
the U.S. Strategic Petroleum Reserve.

Now, having said all of that, we are going to vote tomorrow on a
piece of legislation I introduced in early February. I have spoken
about it on the floor until people fall asleep when bring it up. I know
repetition is difficult around here, but it is important to understand
how urgent this is.
The fact is, we all have one thing in common: None of us has ever
seen nearly $128 oil until now. We have never seen the price of a
barrel of oil go up to $120, $124, or $128 a barrel for oil. None of us
has ever experienced that before. So what does it mean to this economy?
Do we know? I guess not, but we are witnessing it. I guess we know what
it means to the five airlines that are bankrupt.
Do we know what it means to a trucking company? A guy called me the
other day. He is running a trucking company in North Dakota that his
dad started many years ago. They have a good operation. They are a good
family company. They have made a good living for their family over many
years. He said you know what. I do not see how we can avoid shutting
this company down. We cannot afford the fuel costs. We just cannot
afford it any longer.
Now, what are the consequences of all of this, a family driving up to
the gas pump and spending $50 or $60 to fill their tank?
Here is what is happening: The speculators in the oil futures area
are making a massive amount of money. No question about it. Take a look
at hedge fund compensation. It is unbelievable.
The OPEC countries, oh, man, they are going to the bank. They are
going to the bank with our money. You pull up to the pump, you are
lining the pockets of the OPEC and other oil producing countries. You
are lining the pockets of the major integrated oil companies too.
By the way, the major integrated oil companies now all have two
names, because they all got married. They liked each other a lot, liked
the bottom line. Now, it is ExxonMobil, and it is ConocoPhillips. They
have all got two names.
People say to me: what are you talking about? Why do you not let the
free market work? Let the free market work. Don't you understand
anything? Well, I actually used to teach a little economics in college.
But this is not a free market at work. There is nothing about a free
market here.
No. 1, you have a cartel, a cartel of countries that makes decisions
behind a closed door, and they have the capability to make those
decisions stick. In fact, Saudi Arabia is now pumping 800,000 fewer
barrels a day than they did two years ago. Does that decision have an
impact on price? You bet your life it does. So you have a cartel. It is
illegal to have a cartel in this country. You would go to jail for that
in this country. But we have a cartel for oil producing nations.
Then you have the major oil companies which are bigger and much
stronger, with much more muscle in the marketplace. Why? Because
everybody was shaking pom-poms while they wanted to merge. You want to
merge? Absolutely. No problem. Get bigger. Fine.
We are supposed to have 2,000 people working for this U.S. Government
on antitrust enforcement. You cannot find one of them. I know they are
getting paid, but you cannot find one of them. All of these mergers are
approved. So now we have got the OPEC cartel, we have got the major
integrated oil companies with more muscle in the marketplace. Finally,
we have a futures market which has become an orgy of speculation.
Then we are told just let the free market work. What is wrong with
you? The free market is fine. I guess it is fine if you are on the
receiving end of these policies. If you are the one who is the
beneficiary, it is not fine. If you are the one who is going to the
bank to make deposits, boy, this works out pretty well for you.
But if you are on the receiving end of oil, gas, jet fuel prices or
diesel prices, then you are in deep trouble. The fact is, this is
damaging our economy, and it is going continue to damage our economy
until we find ways to address it.
I serve on the Energy Committee. I am also Chairman of the
Appropriations Subcommittee on Energy and Water, so I spend a lot of
time thinking about energy. I understand that in order to address our
energy needs we need to do a lot of things, do them right and do them
well. We need to produce more. I understand that. I described the need
to produce more in the Gulf of Mexico, and what we are trying to do
through legislative efforts. We need to produce renewable fuels, and we
can and should do that. I think there is great capacity in renewable
fuels in the U.S.
We need to conserve more. We waste an unbelievable amount of energy
in this country. We need to be much more efficient with all of the
things we do. We get up in the mornings and never think. We flick a
switch from ``off'' to ``on'' and everything comes on. We put a key in
the ignition and turn it and somehow the engine starts, and we go to
work. We do not think much about all of those issues, and make sure
that conservation and efficiency are unbelievably important.

[[Page S4008]]

So we need to consider production, conservation, efficiency, and
renewables as important elements of an energy policy. But, again, when
my colleagues come to the floor of the Senate and say: Well, you know,
if we could have drilled in ANWR, boy, things would be terrific. That
is all nonsense. I mean, we can produce much more without going to that
which we ought to go to as a last resort, rather than a first resort.
That is why many of us are trying to go beyond Lease Sale 181 in the
Gulf of Mexico. We ought to be producing off Cuba as well where China
is now allowed to drill and produce. So there is so much we can do.
Let's take the first baby steps in the right direction and stop doing
things that make no sense. Let's stop putting oil underground into the
Strategic Petroleum Reserve.
My hope is that, while we might disagree on a lot of things on energy
policy, the one thing we can and I hope should agree on is to stop
putting oil underground when it is going from $120, to $125, to $145 a
barrel. I think there are at least 67 and probably 75 Senators who have
expressed themselves on that. While we might disagree on other parts
of energy legislation, we should not disagree on that, if a
substantial, overwhelming majority of the Senate believes it.

You know, one of the regrets I have had in the Senate in recent times
is we often get the worst of what each party has to offer rather than
the best of both. The fact is we have got two grand political parties
in our country. I know on some things we have different beliefs, and we
have differences of opinion. There are some things from time to time
where we agree. This is an area where we agree right now. It is time to
stop filling the SPR at this point. Not forever but at this point. That
is an area of broad agreement in this Chamber. I hope we can manifest
that agreement tomorrow when we cast a vote on legislation that I
introduced three months ago. I have introduced amendments that
Republicans like Senator Domenici and Senator Snowe have cosponsored.
Many other Senators have signed letters. Senator McCain has expressed
himself strongly and positively in support of this position. So let's
do what we can achieve.
Will it reduce the price of gasoline? Absolutely. Will it reduce it a
lot? I do not know. Probably not a lot, but some. Dr. Philip Verleger,
an economist and energy analyst, testified before the Energy Committee
last year and pointed out that we are taking certain oil from the Gulf
of Mexico and putting underground. This is sweet light crude, a subset,
the most valuable subset of oil. He said that it had an impact of about
10 percent on the price of sweet light crude oil.
Let's do what we can do to put some downward pressure on the price of
oil.
Mr. President, how much time remains?
The PRESIDING OFFICER (Mr. Salazar). The Senator's time has expired.
The Senator from Arizona.
Mr. KYL. Mr. President, tomorrow we are going to be voting on a
couple of different bills, one of which was discussed by my colleague
from North Dakota. The other is called the Domenici bill for the senior
Senator from New Mexico.
I believe that while the Domenici bill does not answer all of the
questions with regard to energy production, it is a very good start
because, first and foremost, it addresses the production side. We know
there is a huge demand and not enough supply of energy. In many
respects, the Domenici bill seeks to remedy that imbalance and provide
for more production.
In the last 30 years, U.S. consumption of oil has grown moderately.
Our dependence on foreign oil has doubled to more than 13.4 million
barrels per day, but our domestic production has remained relatively
flat. Whether oil is purchased domestically or from foreign sources, we
are feeling the negative effects of high prices more than ever.
We have to do something to help bring down the price of oil and gas
at the pump, and today's average was $3.78. What the Domenici amendment
does is open up new production, for example, 2000 acres of the 19
million acres of the Arctic Plain which was specifically designated for
oil and gas leasing so that with its new environmentally sound
directional drilling, very low footprint, at least a million barrels of
oil could be made available, roughly 1 million barrels a day for 20
years. That would make a big difference. It also allows that States on
both the Atlantic and Pacific could petition the Federal Government to
opt out of the current broad moratorium on drilling and, in a
responsible, environmental manner unlock potentially millions of
barrels of crude oil.
The Domenici amendment streamlines and consolidates the refinery
permitting process since frequently that is the bottleneck in getting
refined gasoline to the consumer. It eases difficulties usually
encountered when they want to build or expand refineries. We haven't
built a new refinery in about 30 years.
The amendment suspends delivery to the SPR, echoing comments of my
colleague from North Dakota. This is not a magic bullet. Simply not
buying some oil and putting it in the SPR, while it won't hurt anything
and might actually help a little bit, is a very modest proposal and
does nothing to actually add to the supply of energy. But the Domenici
amendment includes this provision as well. It is not going to do any
harm, and it could do some good. The amendment also allows for the
long-term procurement of synthetic fuels by repealing section 526 of
last year's energy bill which placed certain emissions requirements on
Air Force fuels, for example, and repeals a provision of last year's
bill that stipulated a moratorium on oil shale development. U.S.
domestic oil companies are doing a lot of research into the potential
for shale converted to oil. If we were able to accomplish this, we
could produce much more oil in the United States as a result.
The Domenici amendment is not perfect. I would, for example, not have
included a coal mandate though, obviously, it would be good if we could
convert coal to a liquid fuel that could be put into our transportation
needs. I would have included a domestic oil royalty provision that
would have required that new leases include price thresholds limiting
royalty relief when gas and oil prices are high. That would improve our
energy situation. I also believe it is important to look at some of the
causes of the high oil and gas prices and some of the potential
initiatives that will lessen our reliance on oil which reached $125 a
barrel today. I will talk briefly about the weakness of the American
dollar which has something to do with that.
The bottom line is, there are very good provisions in the Domenici
amendment. While I think it did not go far enough in some areas and had
one mandate which is unfortunate, it is an amendment which I will
support because it will actually produce oil. Much of what comes from
the other side sounds good, but it doesn't produce a single drop of
oil. Without that, we are not going to decrease demand to more match
supply.
I mentioned that one of the costs of oil for American consumers is
the fact that our dollar has decreased in value relative to other
currencies. There was a recent editorial in the Wall Street Journal
which showed that the price of oil based upon gold or the value of the
Euro has remained relatively constant, whereas compared to the price of
a dollar, it has increased dramatically, because the dollar is worth
less money. If a dollar doesn't buy you as much, you have to have a lot
more of them to buy the same quantity of gasoline. I filled up two cars
this weekend. In both cases, I could see the fact my dollars weren't
going as far as they used to. That was one of the reasons I paid more
for the gas I purchased.
European and Asian nations are shielded from this because their
currencies, like the Euro and the yen, have maintained their value.
Europeans pay 80 Euros for a barrel of oil, while Americans are paying
more than $125 as of today. So returning the United States to a strong
dollar policy would greatly reduce the price U.S. consumers pay for
oil. The Federal Reserve should switch its focus from maintaining
economic stability to fighting inflation, its primary goal. In periods
of slower economic growth, the Federal Reserve traditionally responds
by reducing short-term interest rates, but that can exacerbate
inflation which has increased substantially. The Federal Reserve needs
to refrain from

[[Page S4009]]

reducing interest rates further. Our currency is the foundation for our
economy. Without a strong dollar, our economy will not be able to
achieve the stability that is necessary to control oil prices for the
economy.
Something else we can do, as well as reducing our reliance on foreign
oil and promoting reliable and affordable energy sources for the
future, is to acknowledge that the mandates we imposed in the last two
energy bills aren't actually helping to reduce oil prices but actually
have caused them to increase.
I support the development of cost-effective alternatives to fossil
fuels, but the alternatives should not increase the already burdensome
costs of energy and food on American families. As we know, last year's
energy bill effectively mandated that fuel marketers blend $15 billion
of corn ethanol. I support efforts to reduce the ethanol mandate
included in the Energy bill. That will lower gas prices and help to
lower food prices as well. Instead, I believe we should be focusing on
other and better sources of renewable energy already available,
specifically nuclear energy.
Dr. Patrick Moore, one of the founders of Greenpeace, stated in a
Washington Post op-ed 2 years ago:

Nuclear energy is the only large-scale, cost-effective
energy source that can reduce . . . emissions while
continuing to satisfy a growing demand for power.

We all know that other countries have relied significantly on nuclear
power. Today, France meets 80 percent of its total energy needs with
nuclear power and is even able to export surplus energy to Britain and
Italy. On top of the clear benefits for France, the country has also
experienced a steady decline in per capita emissions of CO2
since the 1970s. On the other hand, we rely for electricity production
on 600 coal-fired electric plants that ultimately produce, according to
Dr. Moore, 36 percent of U.S. emissions or nearly 10 percent of global
emissions of CO2. As the public increasingly becomes
informed on the advantages of nuclear power, its misgivings about this
renewable energy source should diminish.
The benefits to Americans could be great--a clean and renewable
source of energy that is produced right here in the United States.
Finally, a word about the majority's energy proposal to increase
taxes on domestic oil energy. According to a 2005 report by the
nonpartisan Tax Foundation, oil companies have paid $2.2 trillion in
Federal, State, and local taxes over the last 25 years. While it is
important that tax policies be reviewed from time to time to ensure
they still make economic sense, we must be careful not to take actions
that would result in even higher prices for consumers. It is hard to
imagine that raising taxes on the oil industry would not be passed on
to consumers in the form of higher prices. Let's get to expanding our
production so we can meet the demand for oil. Let's increase our use of
nuclear energy which can make a big difference in providing electricity
primarily for electricity production. Let's get back to a strong dollar
which is one of the first things we could do without producing a drop
of energy to reduce the cost of gasoline we put into our vehicles.
I yield the floor.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. CARDIN. Mr. President, I am pleased our colleagues have come to
the floor to talk about the energy crisis. Energy prices are soaring.
The Bush administration is doing virtually nothing to help consumers.
Congress must act.
I am pleased to hear so many of my colleagues come to the floor to
talk about ways in which we can act to try to help the consumer.
Americans are hurting today. In my own State of Maryland, my
constituents are not only suffering from increased gasoline prices, but
electricity prices rose by 72 percent in 2007. For a typical family in
Maryland, they have seen a huge increase in their energy costs. For
gasoline alone, the average Maryland family spends in excess of $4,500
a year. They have seen an increase in gasoline prices of 153 percent
during the Bush administration. If you are a small business, you are
vulnerable. Small businesses spend 20 to 30 percent more on energy to
produce the same product as a larger company; 62 percent of small
businesses have to use a vehicle as part of their business. They don't
have the same options larger companies have to invest in energy
efficiency as far as equipment is concerned. They certainly don't have
the same financing that large companies have. So in these difficult
times they have to put mortgages on their homes or, in some cases, even
use credit cards. When they use their credit cards, it is the highest
possible interest rates they can get. So Marylanders are hurting.
Americans are hurting on the energy cost.
The first thing we should have done and we should do today is have an
energy policy that makes us energy independent. I have heard a lot of
my colleagues talk about it. We have taken some steps in that direction
on energy legislation that we passed, but we certainly can do a lot
more on the area of energy independence.
We need to be energy independent first and foremost for the security
of America. We should not be depending on some country halfway around
the world which we disagree with on their international policies
because we need their oil and we are dependent on their oil, and we
can't do everything we wish to do with that country on foreign policy
issues. Secondly, we have to become energy independent for the sake of
the environment.
The environmental risks are real. To give one example of global
climate change and what greenhouse gas emissions are doing because of
the use of petroleum and fossil fuels, I met with my Maryland watermen
over the last week and talked about the fragile condition within the
Chesapeake Bay and how it is difficult for the different species,
including oysters and clams and rockfish, to survive. One of the
reasons is the water at the surface is too warm. This is not conducive
to good, healthy aquatic life. So the health of the bay is impacted by
our dependency and use of oil.
I could talk a lot about our coastal lines in Maryland with the
rising sea level and what that is doing as far as the safety of the
people who live in my State. So for the sake of our environment, we
need to become energy independent and use less fossil fuels.
As we have learned in this economic time, for the sake of our
economy, we need to become energy independent. We need to control our
energy sources so we can control the economic impact and not have to
again be hit with uncertain energy cost increases. Part of that is
going to be a renewable portfolio, alternative fuels, conserving fuel.
We all know that. But we also need to take immediate action to help the
consumer.
As oil prices are rising, gasoline prices are rising, oil companies
profits have gone through the roof. The five largest oil companies in
2007 had profits of $103 billion. That is $2 billion a week in profits.
In 2008, BP Oil has already shown a 63-percent increase over its 2007
profits. So the consumers are paying more and the oil companies are
making a lot more. We need to take action. We need to pass the Consumer
First Energy Act. I thank Senator Reid for introducing this bill. I am
proud to be a cosponsor. I hope we will shortly take this up and be
able to pass it. It will help consumers today.
First, it deals with $17 billion that oil companies receive in tax
breaks. Remember, the profits of five companies were over $100 billion
in 2007. We are talking about tax breaks we are giving which should be
used for energy independence. Instead it is making us more dependent
upon imported oil. What this legislation would do would be to modify
these tax breaks and put the money into an energy independence security
trust fund so we can become independent in energy needs.
We have heard a lot of conversation about the Strategic Petroleum
Reserve. What is happening today is that the Federal Government is
buying 70,000 gallons of gasoline every day. Economics 101, supply and
demand, we are increasing the demand for gasoline by 70,000 gallons a
day. That has a direct impact on the price of gasoline. We have 97
percent of our needs already in the Strategic Petroleum Reserve. There
is bipartisan effort to stop the filling of the petroleum reserve as we
are hitting these huge increases in cost to the consumer. This
legislation deals with that. We should be having better tools to pursue
those who are price gouging. This legislation deals with that.

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I heard the Senator from North Dakota talk about the speculators.
This legislation deals with that. Let me explain that. As Senator
Dorgan pointed out, we have speculators, investors who are buying paper
on future oil who are causing the price of oil to go up, which means we
pay more at the pump. We should be regulating what we call the margins
at a much higher level. Margins mean they have to put up not much
money. They buy it on credit. Well, this legislation would have the FTC
regulate the margin sales and purchases of futures on oil. That makes a
lot of sense. It would calm the speculators and save us at the pump. It
is another way we can reduce the cost immediately to the consumer. And
it deals with offshore speculating, something else we should do.
The legislation also gives the Attorney General the ability to go
after collusion on price fixing in gasoline.
So all these provisions in the Consumer First Energy Act are aimed at
trying to bring down the cost to the consumer now and keep it lower
than it is today. It would provide immediate help and would bring us
closer to meeting our goal of energy independence for the sake of our
national security, for the sake of our environment, and for the sake of
our economy.
So let's remember the struggles of American families with rising
energy costs as we work together. Let's put aside partisan differences,
and let's pass the Consumer First Energy Act to provide real relief to
the consumers in America. It is in the best interests of the consumers.
It is in the best interests of our country. I urge my colleagues to act
in a bipartisan way to pass this most important legislation.
With that, Mr. President, I yield the floor.
The PRESIDING OFFICER (Mr. Whitehouse). The Senator from Texas.

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